Last Updated on October 21, 2023 by Kelvin Nielsen
No; California is one of the least landlord-friendly states in the country!
Among other things, it has a statewide rent control law, strong tenant protection rules, and strict tenant eviction laws. As such, it’s important for landlords to familiarize themselves with the law to know what you can and can’t do in California. (Here is a guide on what landlords cannot do in California).
Why is California Not a Landlord-Friendly State?
Unfortunately for landlords, the following are reasons that make California one of the least landlord-friendly states in the country.
#1: Some cities may require landlords to have a business license.
While state law doesn’t require landlords to have a license to rent out a property, some cities and counties may require it. That’s why it’s important for landlords to familiarize themselves with local laws.
Some of the California cities that may require a landlord to have a business license include Antioch, Berkeley, and Los Angeles.
#2: California has a rent control law.
This is another reason that makes California a renter-friendly state as opposed to landlord-friendly.
Also known as the Tenant Protection Act of 2019 (AB 1482), the California Rent Control Law prohibits certain landlords’ actions when it comes to rent-related matters.
For one, the annual rent increase must not exceed 5 percent + inflation rate, or 10 percent, whichever is lower. And two, you must provide the tenant with a written notice prior to a rent raise 30 days in advance. If increasing it by more than 10 percent, you must provide them with a 90 days’ advance notice.
Also, a landlord must have a just cause to terminate a tenancy. In other words, you cannot evict a tenant for no reason in California.
It also goes without saying that the eviction must comply with the state’s discriminatory and retaliatory laws.
#3: There are extra fair housing protections.
California tenants have two layers of protection when it comes to fair housing. At the federal level, tenants are protected against discrimination on the basis of 7 classes. That is: race, color, nationality, sex, religion, disability, and familial status.
Also, unlike some other states, California extends additional protections to tenants on the basis of primary language, citizenship status, ancestry, mental disability, sexual orientation, income source, and military and veteran status.
#4: California has strict eviction laws.
California’s eviction laws are relatively strict for landlords.
Firstly, a landlord must have a valid reason to evict a tenant. Under California law, you can only evict a tenant for just causes such as failing to pay rent on time, violating a term of the lease, holding over after their lease has expired, the property is being foreclosed upon, or if the tenant engages in illegal acts.
Secondly, you must give the tenant a written notice prior to evicting them. How much notice to serve them will depend on the reason for the eviction. For instance, to evict a tenant for failing to pay rent, you must serve them a 3 days’ notice to pay or quit.
And thirdly, a tenant has a right to defend against their removal. Here are some of the reasons a tenant can give to stop, fight, delay, or win an eviction case in California.
Generally speaking, evicting a tenant in California can take up to 8 weeks from start to finish. It can also take longer depending on the type of eviction and whether the tenant requests a continuance jury trial.
#5: Tenants can withhold rent in California.
Unfortunately for landlords, tenants in California can withhold rent if a landlord fails to maintain habitable standards.
Among other things, a habitable unit is one that has running hot and cold water, adequate trash receptacles, clean and sanitary, and has no rodent- or pest infestation. The property must also abide by the California residential heating requirements.
Additionally, you must respond to the requested repairs impacting the unit’s habitability within 30 days. If you don’t, the tenant may be able to exercise certain legal rights. Including, withholding rent payments, suing you for damages, or breaking the lease without penalty.
#6: The security deposit rules are tenant-friendly.
California security deposit rules are generally considered to be tenant-friendly.
To begin with, there is a limit to how much you can charge. You can charge up to 2X the rent amount if renting out an unfurnished unit and up to 3X the monthly rent if renting out a furnished rental.
Secondly, you can only make deductions in certain situations. That is, for rent owed, unpaid utility bills, cleaning costs, and for repairs exceeding normal wear and tear.
And thirdly, you must return the deposit, or whatever portion remains, within 21 days after the tenant moves out. The penalties for wrongful withholding can be severe, needless to say.
So, is California a landlord-friendly state? As can be seen, it’s inarguably one of the worst landlord-friendly states in the country. But despite these challenges, most landlords are still able to operate successful rental businesses. Just make sure to familiarize yourself with the law, screen tenants carefully, maintain the property, and always be professional and respectful toward tenants.
Disclosure: The content herein isn’t a substitute for advice from a professional attorney. It’s only meant to serve educational purposes. If you have a specific question, kindly seek expert attorney services.
Hi, I’m Kelvin Nielsen, an experienced landlord and accomplished real estate lawyer. My focus is on answering your questions about renting in the hopes of making your life as a renter or a landlord a bit easier.